LIC-Backed Penny Stock Issued Fully Convertible Warrants; Do You Own?

On Wednesday, the company informed the exchange that an Extra-Ordinary General Meeting of the Company will be held on Thursday, August 8, 2024 at 11:00 A.M. (IST) through Video Conferencing / Other Audio Visual Means.
The Board of Directors of PC Jeweller Limited has approved the issuance of up to 48,13,42,500 fully convertible warrants to a specific group of investors.

This group includes individuals affiliated with the company's founders (Promoter Group) and external public members (Non-Promoter, Public Category). These warrants will be offered at Rs 56.20 per warrant, which exceeds the minimum price set by regulations. The total amount raised will be Rs 2,705.14 crore. Detailed terms and conditions of the offering, along with the identities of the recipients, will be provided in a separate document.

The funds raised from this preferential issue (Rs 2,705.14 crore) will be allocated for various purposes, including repaying bank debt (Rs 2,025 crore by April 2026), meeting working capital needs (Rs 529.69 crore by May 2026), general corporate purposes (Rs 150 crore by April 2026), and covering issuance-related expenses (Rs 0.45 crore by February 2026). In the allotment, promoters acquired 15,00,00,000 shares, while non-promoters acquired 33,13,42,500 shares, totalling Rs 2,705.14 crore.

The company had earlier declared that its One Time Settlement (OTS) proposal to settle outstanding dues had been approved by IndusInd Bank Limited. The OTS terms call for the release of bank-owned securities and mortgaged assets in addition to a combination of cash and equity payments. The public was informed of this development in compliance with SEBI's listing requirements.

On Thursday, shares of PC Jeweller Ltd rose by 1.74 per cent, reaching an intraday high of Rs 73.60 per share from the previous close of Rs 72.34. The stock also hit a new 52-week high of Rs 73.30, with a 52-week low of Rs 25.45.

The company boasts a market cap exceeding Rs 3,000 crore, with its shares trading at 1.15 times their book value. As of March 2024, the Life Insurance Corporation of India (LIC) holds a 1.45 per cent stake in the company, while Foreign Institutional Investors (FIIs) have increased their stake to 0.93 per cent, up from 0.78 per cent in December 2023. The stock has delivered impressive multibagger returns of 184 per cent from its 52-week low of Rs 25.45 per share.

Located in New Delhi, India, PC Jeweller Limited (BSE: 534809) is a well-known jeweller. The company started off in April 2005 with one showroom in Delhi's Karol Bagh. Since then, it has grown to operate 80 showrooms in 66 cities throughout 17 states and union territories. PC Jeweller is an Indian company that produces, exports, wholesales, and retails gold and diamond jewellery. The company exclusively sells certified diamond jewellery and hallmarked gold jewellery.